[Federal Register Volume 60, Number 177 (Wednesday, September 13, 1995)]
[Proposed Rules]
[Page 47495]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22664]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 60, No. 177 / Wednesday, September 13, 1995 /
Proposed Rules
[[Page 47495]]
DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 17
Regulations Governing the Financing of Commercial Sales of
Agricultural Commodities
AGENCY: Foreign Agricultural Service, USDA.
ACTION: Advance Notice of Proposed Rulemaking.
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SUMMARY: This document requests comments, prior to the publication of a
proposed rule, concerning how to streamline and simplify the procedures
used to arrange the purchase and shipment of commodities under the
Public Law 480, title I program.
DATES: Comments in response to this document should be received by
November 13, 1995.
ADDRESSES: Comments should be sent to: Mary T. Chambliss, Deputy
Administrator, Export Credits, Foreign Agricultural Service, U.S.
Department of Agriculture, room 4077, South Building, 14th and
Independence, SW., Washington, DC. 20250-1031.
All comments will be available for public inspection during regular
business hours in room 4549, South Building, U.S. Department of
Agriculture, 14th and Independence Avenue, SW., Washington, DC.
FOR FURTHER INFORMATION CONTACT:
Connie B. Delaplane, Director, P.L. 480 Operations Division, Foreign
Agriculture Service, United States Department of Agriculture, 14th and
Independence Avenue, SW, Washington, D.C. 20250-1033; telephone (202)
720-3664.
SUPPLEMENTARY INFORMATION: Title I of the Agricultural Trade
Development and Assistance Act of 1954, as amended, (Pub. L. 480)
authorizes the Commodity Credit Corporation (CCC) to finance the sale
and exportation of agricultural commodities on concessional credit
terms. 7 U.S.C. 1701 et seq.
CCC seeks comments and recommendations from the public on any ways
in which the Pub. L. 480, title I program could be simplified or
streamlined. Comments could include suggestions about program
regulations, purchase authorizations, commodity and freight invitations
for bids, letters of credit, letters of commitment, the sales approval
process (including Form FAS-359, ``Declaration of Sale''), ocean
transportation (including Form CCC-106, ``Advice of Vessel Approval'')
and any aspect of the program which could be improved.
Background
After CCC and the recipient country have signed a title I
agreement, CCC issues a purchase authorization (``PA'') which
establishes general specifications for the commodity to be purchased,
sets the contracting and delivery periods, and establishes conditions
for CCC's financing of the commodity and any authorized ocean
transportation costs. The recipient country issues, upon CCC approval,
public Invitations for Bids (IFB's) for commodities and ocean
transportation. These IFB's contain the country's requirements
including precise commodity specifications, delivery dates, and payment
documents. Subsequently the importer and suppliers of commodities and
ocean transportation enter into contracts based on these public IFB's.
After the contracts have been entered into, the importer causes a
letter of credit to be opened through a U.S. bank in favor of the
commodity supplier; and a separate letter of credit in favor of the
supplier of ocean transportation when CCC is financing any part of the
ocean transportation. CCC also issues to that bank a Letter of
Commitment pursuant to which CCC will reimburse the bank for payments
made, or drafts accepted, under the letter of credit. See 7 CFR 17.15.
In this manner, the supplier receives payment from the bank upon
presentation of required documentation. The bank sends the documents to
a specified Federal Reserve Bank, which debits CCC's account and sends
the documents to CCC for post-audit.
In addition to soliciting comments generally on the Pub. L. 480,
title I program, CCC is interested in receiving specific comments on
three questions. First, could the PA be eliminated and the relevant
portions of the PA be incorporated into the financing regulations or
the IFB's, as appropriate?
Second, because opening letters of credit can be time-consuming and
costly for the importing country, should CCC simply pay the supplier
directly for the commodity and ocean freight costs which are financed
by CCC?
Finally, should CCC finance commodity contracts on a cost and
freight basis, or a cost, insurance and freight basis, instead of
requiring separate contracts for the commodity and the ocean
transportation? Under these contracts the commodity supplier would be
responsible for securing ocean transportation on U.S.-flag vessels as
needed to meet the requirements of the Cargo Preference Act. In
particular, comments are requested regarding the effect of such a
change on small businesses, and on how CCC could identify the portion
of the total offer price attributable to the commodity and that
attributable to the ocean transportation. This is necessary to permit
USDA to continue to perform price review on the commodity cost and
provide the information necessary for the Maritime Administration to
determine whether the U.S.-flag freight rate is ``fair and
reasonable.''
CCC emphasizes that comments on any and all parts of the program
are encouraged and that all comments will be carefully considered.
Signed at Washington, D.C. on July 17, 1995.
Christopher E. Goldthwait,
General Sales Manager, Foreign Agricultural Service and Vice President,
Commodity Credit Corporation.
[FR Doc. 95-22664 Filed 9-12-95; 8:45 am]
BILLING CODE 3410-10-M
